E-commerce Transactions: Issues and Disputes

From a practical perspective, transactions that occur over the Internet can face similar issues that regular business transactions may encounter in their daily operations.  However, e-commerce transactions have the added problems associated with cyberspace laws.  It is nearly impossible for a business to be successful these days without having a website. Although, not all websites actively conduct business over the Internet, however, e-commerce related issues and disputes may arise from having an online presence.

What issues and disputes face e-commerce transactions?

E-commerce transactions have created a new environment for companies that conduct their business on the Internet.  For example, contractual and non-contractual issues, such as free speech, consumer protection, and competition laws now face businesses that ship products, provide online goods/services, and use the Internet for marketing.  Therefore, conducting business online involves unique legal concerns that is distinct from traditional business models.  In sum, the concerns are centered on privacy, security, and regulation.

In recent times, privacy concerns have been discussed in the media since large corporations yield their customers’ valuable confidential information (e.g., Date-of-Birth, Social Security and/or credit card numbers).  So, these companies must keep a certain level of security to ensure the privacy of their customers.  Not only are laws in effect regulating the protection of customer information, but also companies have to abide by their contractual obligations to protect customer privacy. Competition law and domain name disputes are also commonplace due to the limitations they create for companies.  For example, in the past there could be a “Mama’s Pizza” in every city, but now companies have to find domain names that are not in conflict with each other and do not cause confusion among consumers.  Online anonymity has become an issue with websites that are established for the purpose of consumer reviews.  The issue regarding defamation with the underlying intent to cause financial harm to businesses or individuals has become a commonplace in e-commerce litigation.  However, plaintiffs are having difficulties with identifying and locating anonymous defendants, and find it challenging to remove disparaging online statements. Intellectual property violations are a large problem due to online copyright, trademark, or patent infringements. Moreover, the ability for musics or videos to be properly downloaded has become widespread and has caused financial damages.

What forms of resolutions are available?

Litigation is the first choice when attempts to reach a reasonable solution is unsuccessful. Various attempts to correct a wrong before litigation include: (a) credit card charge-back mechanisms; (b) merchant complaint resolution mechanisms (e.g., alternative dispute resolution agreements); and (c) complaints to governmental authorities, consumer protection agencies, and small claims courts.  In fact, cross-border transactions create jurisdictional issues.  It is remarkable that e-commerce transactions allow a larger number of multi-state and multi-national transactions to occur every day.  As a result, litigation has occurred in both domestic and international courts, which can mean that state, federal, or international laws are applicable.  As stated above, online anonymity is an important issue in terms of litigation because it can be difficult to identify and locate the individual who is in violation of the law.  This form of anonymous activity is particularly prevalent in defamation and online fraud cases. In order to receive guidance on how to initiate or prevent litigation, it is best to consult with legal professionals who are adept in the field of e-commerce.

At our law firm, we assist clients with legal issues related to business, technology, and e-commerce transactions.  You may contact us to set up an initial consultation.